HR Tech Weekly Logo

Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 8AM Pacific – 11AM Eastern, or catch up on full episodes here.

HR Tech Weekly

Episode: 16
Air Date: April 16, 2015

 

This Week

About HR Tech Weekly

Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 8AM Pacific – 11AM Eastern, or catch up on full episodes here.

HR Tech Weekly Episodes

Audio MP3

 

Transcript

Begin transcript

John Sumser:

Good morning and welcome to HR Tech Weekly, One Step Closer with Stacey Harris and John Sumser. It’s good to be with you today. I’m coming to you live from beautiful downtown Occidental, California and Stacey, you’re where?

Stacey Harris:

I’m in Fort Lauderdale today. It’s beautiful weather, we had a little bit of rain this morning but it’s sunny, I’m looking out over the ocean, I can’t complain today. Very nice.

John Sumser:

My jet setting partner in crime.

Stacey Harris:

Yeah, we’ve been all over the world this week.

John Sumser:

We have been all over the world. We were both in New Orleans for the Equifax Client Forum, which is always an extraordinary event and they did themselves right again this year. Did you have a good time?

Stacey Harris:

Yeah, this is my first time going to that event and I thought there were some really interesting … Not only was it valuable to get more content on Equifax and the work that they’re doing, but I was actually quite impressed by talking to a lot of their clients. These were people who were at the center of what’s happening with APA and payroll compliance and challenges from a day to day perspective. It’s a very pragmatic group with a lot of interest in where the market is going from a compliance perspective. It was a good conference, I thought.

John Sumser:

Yeah. It’s an interesting thing. Equifax has managed to build a team of the absolute best and brightest in the compliance business. Which has always struck me as a particularly dry prison. Then I go to the conference and I meet these delightful, smart, intelligent people who are doing the work that makes the rest of HR possible.

Stacey Harris:

Oh yeah. They’re doing more with analytics than I think anybody gives them credit for. I met a couple of people who are doing compensation banding and they were analyzing their payroll data across multiple regions and groups. I was quite impressed with the amount of data analytics that this group was at least dabbling in, or working in. Compared to what you see at the other events.

John Sumser:

Yeah. Well it’s a data group. It’s a data group.  It’s not an accident that Equifax bought eThority some years back which was the leading analytics platform of it’s time. The eThority team, who are all super, super, smart and super creative people from Charleston, South Carolina have become enmeshed in the leadership of Equifax’s operation.

Stacey Harris:

I was really … Mike Psenka, who was the President of eThority, long time relationship.  I know both you and I have been watching that company for a long time even before we picked up by talks and now Equifax. What I was surprised by is how integrated his whole team is now in that organization. That was very nice to see, is that they’re … Every company you meet someone and they’re from the various groups that organization picked up and they’ve really integrated them well.

Really nice also meeting Myra, who’s the head of analytics on the other side of the business, who does the data analysis and data crunching. That was really fascinating to learn the amount of data that they just have available from all the work that they’re doing both on the payroll/credit/taxing all that side, and how they’re comparing that to the work that they’re doing with Mike Psenka’s group too. It will be interesting to see what they come up with.

John Sumser:

I think the only other company I’m aware of that has a full time team of economists is Manpower.

Stacey Harris:

Yeah.

John Sumser:

So it’s really a lot of fun to be with the high end, dorky, nerdy, econometrics people because that’s the kind of stuff that I love. I really look forward to going to that thing every year. They do interesting stuff.

This year they have an infrastructure story. They opened the conference with stories of disaster and disaster recovery. I think the idea of that, the core of HR, the core data of HR, is what you need to have right so that you can survive disaster. It’s an interesting concept that nobody really talks about. The compliance, INI immigration work, unemployment claims, that sort of stuff is like the trash business in HR. Nobody really wants to have a long conversation about it. Yet it’s really the foundation for everything else.

Stacey Harris:

Yeah. What they’re doing, is not only creating a platform around it, which I think they’ve got a little ways to go there, to be honest. They’re building out a concept that there’s a total compliance platform that they’re going to connect a lot of these dots that people right now think of separate, insular little bits of HR. I think they’re also talking about that this platform has to be flexible based off of, not only things like disaster needs and changes in the economy, which is where their economists all come in, and the data now comes in. Also, political changes, and regional changes and local state changes. They’re really in the space that’s the reason most HR technology firms have sort of shied away from, is that it’s constantly changing. So the platform can’t be too rigid in how it’s working.

John Sumser:

That’s right. And New Orleans was fun!

Stacey Harris:

New Orleans is always fun! There’s no doubt about that. This was particularly fun. We got to see a little bit of mini Mardi Gras while we were there.

Speaking of compliance issues, the other thing that happened this week is that I thought was sort of interesting, was the news that LinkedIn bought Lynda.com.  Which is one of the largest training organizations in the market. Particularly for technology and compliance area. Had you had a chance to read anything on that purchase? I know you know LinkedIn quite well and I know Lynda.com quite well, so it’s interesting hearing your perspective on that one, John.

John Sumser:

So the question is, this is the point in time where the big social media companies have to figure out how they’re going to be relevant. What has happened in the 20 or so years that there’s been internet in the enterprise, is that big players consolidate. Remember AOL and Compuserve? Those big players consolidate Microsoft. Then nobody has been able to extend their franchise.

One of the other pieces of related news, is the EU has decided to go full bore on prosecuting Google for anti-trust. What happens when the government starts to step in and regulate, which you can imagine LinkedIn is starting to get to that pretty soon. Companies feel on the defense and they stop expanding.

LinkedIn would like to be the place where you expand your resume besides documenting your resume. But it seems to me that merging those two roles gets you some trouble. The idea of having credentials and they way to acquire those credentials in the same bulb for everybody, is … That’s how things get corrupt when you have credentialing and the training associated with credentialing managed by exactly the same people in exactly the same way. I’m going to be surprised if this is a big success. But you know M&A has a 95% failure rate.

Stacey Harris:

Yeah. They haven’t done very well, I would say. It’s still growing but I don’t know that it’s as big as it was with the purchase in 2012 of the Slideshare program at $119 million. Sort of the same concept. That idea of bringing content to a location sharing content from a professional perspective. I do think there’s a real digress. You hit it on the nose a little bit, with the fact that training is a …

If you’re certifying with training, if you’re sort of making it something that is a requirement, then there’s some really big risks with connecting that with what is the place you document. It’s also a bit of a risk with connecting it with what more people consider as an HR function than a training function. So there’s 2 places in that.

Where do you lose the rigor of what is a very, and Lynda.com has been known for being one of the most rigorous online platforms for training and development in a very long time. They are not, like many of the new social platforms where just anybody can put content on it. They really have created sort of the gold standard for that. With a really strong sense of instructional design and a strong sense of production behind what they do. So there is a challenge around that as well.  Is this very large, big entity in the market going to go the way of some of the other large online training programs?

I think the bigger issue here isn’t even issues with risks about tracking and not tracking it, and who owns it and development of it. I think the bigger thing here that I see happening is, I actually think this isn’t a bad move for LinkedIn. I think in order for them to keep growing, and the value and Jeff, the CEO basically said this is the last piece of the puzzle that they wanted. I don’t know if that means they were going to plan to do more, but this is [inaudible 00:11:44] how he positioned it.

What I was really interested in is that, I think there’s a shift taking place in who owns learning and development in the market. This, I think, is the bigger conversation. That LinkedIn may not even be thinking about the resume in the purchases of what they’re doing here.

The ownership for your own skills and for your own development has often been a shared responsibility between your university, your local government, your company and you as a professional. That percentage of who owns that development has continuously gotten to be more and more on the shoulders of you as a professional. Where you get that information and how you get that information is going to become a really critical point. What you’ve been using social media tools for if you’re looking to increase your professional viability and your options in the market place.

To me this is more of a statement of, okay, if I want to increase my overall value in the market, I have to increase my skill set. I don’t think it’s a certification issue, I think that’s just a, I’m increasing my skill set need right now.

John Sumser:

I think you’re right. I think not only is training falling onto the shoulders of the individual, but it is fragmenting them as well. Courses used to be measured in hours. Now courses are measured in minutes. They used to be things that you went to and now they are things that come to you. That’s the change that you were talking about.

I want to drift back for a second. The problem with search engines is that, if they don’t keep everything that they search arms length, then they start delivering self serving goals. If LinkedIn starts to prioritize training taken through it’s training arms over training taken other places, then nobody will be able to trust them.  They will have not just entered the training market, but they’ll have entered the training quality assessment market.

Stacey Harris:

Yep. Promoting that person is what you are saying, over someone else, basically. Promoting that person who has taken their training. Well that leads into, what is the business of LinkedIn? Is the business … Right now their revenue is primarily generated by their ability to produce people. Produce people for particular jobs and roles. That’s their primary revenue right now.

John Sumser:

They will not be able to avoid the conflict of interest that says, if we promote the people from Lynda.com to the top of the list when you search for somebody in a profession, their revenue increases. When people figure out that when you take classes from Lynda.com your resume gets better treatment, they’ll take classes from Lynda.com and that means they’ll be promoting their own, in-house brand over a better course. That means somebody else will be able to come along and say, we can do credentially better than LinkedIn does. It creates this unavoidable conflict of interest that every search engine runs in to. That’s part of why Google is in so much trouble.

Google was fudging the search engine results to make their products sell better. They’ve been doing that for years. Everybody knew it was a possibility, but now it’s clear that successful search engines don’t have any choice but to cheat if they want to grow, in the way that their investors want them to grow. It will be really interesting to watch because both of these dynamics are important. If you think like I do, that this takes Lynda.com off the table as credible training source, fairly quickly.  There’s all sorts of interesting opportunity here.

Stacey Harris:

There’s a huge group of organizations on the back side of this who are just clamoring to take the role of top leading consumer based content.  I think it’s something to be very interesting to note that Lynda.com, although 2/3 of their business is based off of direct to consumer, another 1/3 of their business has been based off of business to business training programs which has been a growing part. They really got into, just about 3 or 4 years ago if I recall, started the real business track for them. Again, depending on what LinkedIn sites do and depending on the regulations that you’ve been talking about and the issues going on with Google.

If LinkedIn is thinking about ways to diversify their revenue model, the industry for training and development is very lightly tapped. I think if it is going to be a consumer driven market. The training is going to be on the shoulders of the end users.  Businesses are still going to need to figure out a way to get their voice in that training air band.

I think there’s some opportunity there to increase that revenue that I said right now is like 3-5% of what LinkedIn’s going to make, is going to be increased by Lynda.com offers. But you’ve got a lot of organizations behind Lynda.com. You’ve got Udemy, you’ve got Kahn Acadamy, EDUS. These are organizations that have big financial backing now and are really interested in taking the market.  Both from a business to business and an end user training perspective. You were right, there’s a lot of changes going to come.

John Sumser:

Yeah. That’s exciting. It may be that Lynda.com is the end of the old era of thinking about training.  I imagine increasingly, that what an LMS is going to do is stitch together lots of little pieces. Rather than being a standard scheduling tool like it is in a lot of ways. The LMS of the future is a tool for sourcing training that already exists online and weaving it into your curriculum. This will push that forward.

Stacey Harris:

I think it’s going to push it forward. I also think the market is. This is a market that’s not changing this year, but I think it will change in the next 2 to 3 years. The element of [inaudible 00:19:10] has been very static for quite some time. There’s been no real big changes in the learning space. Nothing that’s shaken up the whole market. Probably the multiple online course content effort. That has been the most earth shaking thing that has happened in the learning space in the last five years.

It’s ripe for something big to come in and make a big change. Similar to what we just saw in the core HR workspace moving to the cloud. And similar to what we’ve seen in other areas where we’re seeing big changes taking place in combined versus talent sweep models. I think the learning space is an area where we’re ready to see something new. I don’t know that I’ve seen anything yet that is totally new from what we’ve had in the last ten years. So I think you’re right, there is a new thing coming. It’s not here yet, I would say.

John Sumser:

Maybe this is a good segue to the story about the CEO of Gravity Payments exchanging his compensation so that his people could get paid. He took his $1 million a year paycheck, and cut it to $70,000 as the first step in guaranteeing that the base level employee in his organization would be making $70,000 a year within the next three years. That’s a huge recognition of a cultural and economic problem we are facing and a brave and exciting move.

Stacey Harris:

What I was really shocked by, as I read this article and we’ve been watching it all on the news, and all the commentary about it. What was sort of interesting to me, and this topic wasn’t so much that the fact that it happened. I think it’s somewhere between a media stunt and a young guy who doesn’t really need as much as he’s probably making. Reading through some of these interesting material and saying, hey, this would be interesting to see if this would work in my company.

 

I saw him this morning on a a couple of talk shows as I was getting ready for my event. I thought, well, he seems to have a good grasp on the fact that he’s trying to drive more revenue by creating an employees environment. Where they have less to worry about. That seemed to be his big gist from the happiness article that he had read.

What I was actually thinking about as I was getting all this was, What does this say in relation to an HR professional? What did his HR leader say to him when he came with this idea? The segue of what you were talking about is, if we set the stage for the employee to have the right level of overall incentives and compensation, what will they do then when you give them the what’s next after this. What do they expect after that? Or, what will they do to show that there’s value proposition in getting this kind of a raise. So those are the two things that crossed my mind. It’s a big news, I don’t know if it will play out for him the way he thinks it will.

John Sumser:

The implications of things like this are not necessarily in the place where the news happens. It’s very interesting to me that this is the same news cycle in which there is a service employee demand for $15 an hour minimum wage that is spontaneously exploding across the country. That something that looks like the early days of union organization, facilitated by the internet, with people from varieties of companies in specific industry segments organizing to protest for higher wages. I think that’s pretty interesting and what’s worth noting is that while HR has been running around with this engagement story, wages have stagnated for a decade.

Stacey Harris:

Yeah, they’ve been terrible. Particularly. Performance overall, and productivity in people have actually gone up. We’ve asked more and more of people as the wages have continued to stagnate.

John Sumser:

There’s going to be an enormous economic adjustment that’s inflationary. It will be difficult in a lot of ways, but there’s a whole generation of people who used to be young people. Who have been working today for $30,000 or $40,000 a year. Can’t buy a house. Can’t keep up with the basic requirements to maintain their lives. Who are the back bone of our economy and they’re going to get raises. Their pay is going to double in the next five years.

Stacey Harris:

And what is HR’s responsibility in sharing some of this and making some of this transparent? I think that’s the piece that hit me most about this.  This gentleman sort of has been, well I heard this from my friends, they told me how tough it is to do this. That was a lot of his commentary on the talk shows. That was what was true. I said, well, shouldn’t he have been hearing this from his HR representative?

John Sumser:

It’s interesting. While there is, in the HR community, there is this strong central justice sentiment. HR is an arm of management. HR is not an employee representation organization. It’s not a surprise that this is going to catch people in HR unawares. And you’re right. They’re not going to know where they sit on this.

Stacey Harris:

This is going to get worse as technology, and I’m not just talking about HR technology, I’m talking about our phones, and the ability to capture information. The ability to get details into the market. All this transparency becomes even more broad across the total market. We’re going to see more and more people who even in private companies get data on what’s happening between executives and senior level and everyone else in the companies salaries.

John Sumser:

It’s going to be fascinating. There’s a trend that was started by Salary.com ten or twelve years ago to make all of this stuff transparent. Now somebody is going to have to figure out how to do this question that’s coming up. It will become an HR thing because we’re going to see … Do you know what salary compression is?

Stacey Harris:

Mm-hmm (affirmative)-

John Sumser:

We’re going to see salary compression issues all over the economy as companies try to figure out how to phase in this next generation of wages and new people start getting paid more than old people.

Stacey Harris:

That’s one of the risks that you’re going to start to see across the board, is that as this expectation for wages and higher levels rolls across the market, there’s the other side of the picture, which is where do we …

 There was the assumption at one point in time that the minimum wage value sort of fell out there every couple of years. That things would rise with inflation. We’ve gone through about 10 years, 15 years now of that not happening. Once we hit this point of getting to a point where people feel that they have raised the boat rate to at least some level that’s acceptable, does it again go back to waiting until people get upset about it? Or will there be some sort of pool or mechanism put in place to keep it moving in the way it needs to. That’s the other side of that picture.

Yes, there’s going to be a lot of people who are left behind under that bar, who were not people that worried about because they don’t have the skill sets that they require as much training.

John Sumser:

It’s so much easier to talk than to find work, I think we may see a spike in the [inaudible 00:28:50]. I think this may be the point where people start really moving quickly between jobs. It’s easier at times like this to get your raise by going to another company.

Stacey Harris:

Exactly. There’s whole other topic there about longevity in an organization and when do organizations start to incentivize longevity in a real sense, and what does that look like?

Next week, John, we’ve got a couple things we can definitely highlight next week. One is, there’s a lot of stuff going on in the payroll market. We didn’t get a chance to talk a little bit, but there was an announcement this week about Workday launching their UK payroll piece. I think that’s a really interesting conversation to go along with all this. There’s some talk about as payroll systems change, does that add to some of the transparency? I think also it would be really interesting to talk about what happens with this idea of people, if they are truly moving to get raises, is there some way to address that issue and are organizations willing to take that on at this point, in reality.

John Sumser:

Yep. It’s going to be an interesting time. We have blasted through our allotted time. It’s been great to catch up with you. I know you’ve got plenty of things tugging at your hem in Fort Lauderdale so I’m going to encourage you to go deal with that. We will talk soon. I want to thank everybody for checking in with us too. Thanks Stacey.

Stacey Harris:

Thanks John. Thanks everyone. Have a good afternoon!

John Sumser:

You too! Bye-bye now.

Stacey Harris:

Bye-bye.

End transcript



Tagged with:  
Read previous post:
cropped illustration of twitter birds on HRExaminer.com April 20, 2015
50 Tweets of Employment Branding

In this twitter Q&A, HRExaminer checks the pulse of employer branding in HR and recruiting.

Close